The big economic update this week will be Friday’s release of the advance estimate for Q1 2013 GDP. Earlier this month, The Wall Street Journal did its monthly survey of economists on a variety of economic metrics, including GDP. Forty-nine of the 52 economists solicited participated. Before we look at the Q1 forecasts, let’s first review their outlook for 2013 annual GDP.
I’ve also highlighted the range of Fed forecasts, projections that date from the meeting of the Federal Open Market Committee on December 11-12, 2012 and released last month. I’ve calculated the median (middle), mean (average), and mode (most frequent):
The upper end of the range, from 1.8 percent to 3.9 percent, has some optimistic outliers north of 3 percent. But the median and mode, both at 2.4 percent, and the 2.5 percent average are right at the middle of the Fed’s range. Actually, the Fed’s “central tendency,” which I didn’t highlight on the chart, was 2.3 percent to 2.8 percent.
Here is the same chart with the 2014 predictions and Fed range:
Twelve fewer economists were willing to make forecasts as far out as 2015 (had I been solicited, I’d certainly have been one of the missing). For this shot in the dark, the median and average were a round number 3.0 percent (actually, to two decimal places the average was 3.01 percent), and the mode (5 of the 37 who responded) was a bit higher at 3.2 percent.
Of course the more immediate focus is Q1 GDP, the advance estimate of which we will learn on Friday. The Fed doesn’t bother with forecasts of quarterly GDP, but the WSJ economists definitely see an improvement for Q1 of this year over the 0.4 percent second estimate for Q4 of last year.
Hurricane Sandy is behind us, the fiscal cliff turned out to be a minor bump, and sequestration hasn’t torpedoed the economy (at least not yet). In the final chart above, the median and average are both at 3.1 percent, and the mode (10 of the 49 economists) is 3.0 percent. Even the 1.2 percent outlier at the low end sees Q1 was a major surge in growth from Q4 of last year.
At 8:30 AM EST on Friday, we’ll get the real number.
Doug Short Ph.d is the author of dshort at Advisor Perspectives.